'California did the impossible,' Brown says in State of the State

Gov. Jerry Brown says California has averted fiscal collapse. He calls for investing in water and rail programs, but warns: 'Fiscal discipline is not the enemy of our good intentions but the basis for realizing them.'

California Gov. Jerry Brown delivers his State of the State address at the… (Luis Sinco, Los Angeles…)

SACRAMENTO — Seeking to reclaim the state's identity as an innovator and engine of growth, Gov. Jerry Brown declared in a sweeping State of the State address that "California did the impossible" in emerging from financial crisis poised to lead again.

Brown outlined a vision for the state Thursday in remarks that were equal parts history lesson, lecture and rhetorical flourish. It includes major investment in water and rail systems, more robust trade and an education structure free of regulations that crush creativity.

Invoking California's "spectacular history of bold pioneers meeting every failure with even greater success," he asked a joint session of the Legislature to overhaul the way schools are funded, build a controversial bullet train and aggressively expand healthcare to millions of needy residents.

Californians "have a rendezvous with our own destiny," he said, in an allusion to Franklin Roosevelt's famous Depression-era speech.

At the same time, he sounded the familiar theme that the state should not try to live beyond its means. Drawing on the Book of Genesis, he recounted Pharaoh's dreams of well-fed cows eaten by starving cows — a warning that famine can follow plenty.

"Fiscal discipline is not the enemy of our good intentions but the basis for realizing them," he told an Assembly chamber packed with legislators, state Supreme Court justices and other dignitaries who applauded throughout the 24-minute speech.

Brown plans to take his message to Washington, D.C., next month, when he will attend a meeting of the National Governors Assn., and to China in April, when he leads a state delegation to christen California's new trade office there.

The governor is at a high point in his long political career, presiding over a Capitol now entirely controlled by his Democratic Party and having convinced voters that higher taxes would restore the state's financial footing.

He will have more influence over lawmakers than any governor has had in years. He solved for them their most immediate problem: an out-of-whack budget that has constrained their ambitions and forced them to cut deeply into programs their constituents value.

But despite Brown's proclamations that California no longer has a deficit, the state faces long-term financial problems that could stymie his agenda.

"It was a springtime speech, but California is more likely to be in Indian summer," said John J. Pitney, professor of politics at Claremont McKenna College. "The good economic times are probably temporary."

The governor's budget does not address hundreds of billions of dollars in debt the state has accumulated. And in his speech, Brown acknowledged the cost of healthcare for more Californians, in line with the new federal law that expands coverage next year, is unclear.

"Ignoring such known unknowns would be folly," he said.

In addition, his general call for restraint may collide with plans by legislative leaders to restore sizable programs slashed or eliminated in recent years.

After the speech, state Senate leader Darrell Steinberg (D-Sacramento) seemed eager to do just that.

"If the economy grows, and if there is opportunity, and if there is headroom to restore some of what's been lost, of course we are going to," Steinberg said.

It also remains to be seen whether Brown's alliance with the state's influential teachers unions and other school groups can withstand his proposals to shift resources from wealthier school districts to poorer ones and eliminate or ease some popular state mandates, such as restrictions on class size.

Brown vowed to do away with mandates that inhibit school flexibility and creativity and to shift more control from Sacramento to local districts. He said the system for funding education is "overly complex, bureaucratically driven and deeply inequitable" and called for a new formula that would give a financial boost to districts "based on the real-world problems they face."

He prodded leaders of public colleges and universities to work harder to control costs, graduate students in four years and make it easier for them to transfer from community colleges to universities.

"Tuition increases are not the answer," he said to a standing ovation. "I will not let the students become the default financiers of our colleges and universities."

Brown has long been hailed as an environmental visionary, but activists were rattled by his renewed call to rethink regulations such as those in the California Environmental Quality Act, a landmark law that Brown says is now creating obstacles to economic growth. Brown wants to reduce technicalities that can be used to hold up project permits.

The Natural Resources Defense Council declared after the speech: "We urge Governor Brown to reject efforts to weaken the California Environmental Quality Act, which has provided protections against local pollution and health threats for residents for more than 40 years."